South Yorkshire Housing Association manages
4,000 homes for people in South Yorkshire and North Derbyshire.
One third of our homes provides some form of additional care and
support for people with special needs. In addition we have set
up a partnership with Yorkshire Housing Association, Safe Haven
Yorkshire, which provides housing and support for 3,000 asylum
seekers across Yorkshire and Humberside under the Home Office
Dispersal Programme. SYHA's services are provided primarily in
urban areas with high levels of deprivation and low property values.

In preparing this memorandum we have drawn extensively
on two research studies which, in our view, provide the best analysis
we have come across of the reasons for housing market failure
in some northern areas and the action required to address the
issue of empty homes in our area. The first study is "Changing
Housing Markets and Urban Regeneration in the M62 Corridor"
(Brendan Nevin and his team at CURS 2001), and the associated
reports prepared by this team. This report put forward the concept
of a "Housing Market Area" to recognise that housing
markets operate in localities across local authority boundaries
and that public policy needs to address this; previous approaches
based on small areas or neighbourhoods within one local authority
boundary are no longer adequate to meet the major challenges of
housing conditions, supply and demand. The second is the HARCC
report (Housing and the Regeneration of Coalfield Communities)
which has been published by the CRESR team at Sheffield Hallam
University in August 2001. This memorandum also draws on the Regional
Planning Guidance and the Regional Housing Statement.

This memorandum seeks to establish why housing
markets are failing in some areas, the problems that this causes
and measures which can be taken by national and local agencies
to address the problem of empty homes. The analysis seeks to challenge
prevailing social policies in several areas:

 the way in which public subsidy for
new social housing is currently allocated

 the overriding importance placed
by Regional Development Agencies, European Objective 1 funding
and other neighbourhood renewal funding programmes on economic
revival

 current planning policies, particularly
in relation to PPG3

 some elements of the Government's
Housing Policy as set out in "Quality and Choice: a Decent
Home for All"

The two research reports referred to above are,
we would suggest, worthy of detailed consideration by the Inquiry.
Copies of the M62 study are widely available; copies of the HARCC
report can be provided by SYHA for inquiry panel members if required.

2. THE CAUSESOFTHE
PROBLEM

The Social Exclusion Unit PAT7 report highlighted
the wide difference in the extent of low demand across the country.
The proportion of Council stock considered to be difficult to
let ranges from 5 per cent in London and the South East to 23
per cent in the North of England. The problem is compounded by
migration of 20,000 households from the North of England to the
South of England each year. In addition, migration into the UK,
which is the largest source of population growth in this country,
is concentrated in London and the South East in spite of recent
efforts by the Home Office to disperse asylum seekers to the regions.
It is not necessary to look far to find the cause of this trendthe
North of England contains seven of the 10 areas with the lowest
economic activity rates in England. The extent of the decline
of the GDP in the South Yorkshire sub-region has been so marked
that South Yorkshire now qualifies as one of four areas in the
UK entitled to receive Objective 1 funding from the European community.
(In 1996 the GDP dropped to 73.6 per cent of the European average.)

The movement of population within regions is
equally relevant with smaller urban areas and more rural locations
benefiting at the expense of the larger conurbations. For the
last 20 years planning policy has contained a presumption in favour
of development, leading to decentralisation, peripheral development
and an exodus of more affluent households from the big cities,
and a net surplus of housing in some areas. As the HARCC report
states:

"Within the coalfield part of the sub-region
the housing surplus derives primarily from the private sector
house building programme" (page 13: HARCC report)

One of the unintended consequences of this private
sector house-building has been the loss of viability of housing
in some older neighbourhoods as many purchasers have been able
to leapfrog the older housingwhich has been the initial
destination of first-time buyersand buy the newer housing,
often on the periphery of existing communities. During the early
1990's forecasts of housing need were made by the South Yorkshire
local authorities when Unitary Development Plans were prepared.
It is likely that these forecasts have over-estimated population
growth. The HARCC team analysed population figures from the censuses
and predictions by the Office of National Statistics and concluded
that the population in South Yorkshire had been remarkably stable
over the last 20 years. In Rotherham the population has remained
static at 252,000 between 1981 and 2001. By contrast, the UDP
for Rotherham forecast a population growth to 258,000. Similarly,
the Doncaster population has been static at 290,000 over the 20
year period, whereas the UDP forecast population growth to over
300,000. These figures conceal changes in age structure. A decline
in younger age groups, critical for household formation, has been
accompanied by an increase in the elderly population. One of our
local Unitary Development Plans summarises the effect:

"This indicates a scenario of urban decline
in terms of losing the very people who are likely to set up home,
take up jobs and invest in the local economy (Doncaster Unitary
Development Plan)"

This suggests an increase in household formation,
particularly of single person households, and a decrease in households
requiring larger three and four bedroom family accommodation.
However, the inaccuracy of the local plan projections, combined
with a planning system which saw its role as primarily ensuring
land was released to meet demand from owner occupiers, has meant
that large numbers of three bedroom and four bedroom houses have
been built. The HARCC team estimate that approximately 20,000
new three and four bedroom houses have been built in the coalfield
area during the 1990's. Although the new Regional Planning Guidance
indicates a change in direction, suggesting in excess of 60 per
cent of new homes should be built on brownfield sites, the trend
of building on new greenfield sites is taking time to turn round.
Indeed the largest single greenfield housing estate being developed
in the UK is the 750 home development in Bramley, Rotherham. The
HARCC team were able to identify 67 private newbuild sites with
over 10 homes under construction or plannedthe majority
comprising greenfield sites outside urban centres.

The migration of large numbers of affluentsubstantially
whitepeople from urban areas has placed further pressure
on town and city centre housing markets. Property values in some
urban areas have collapsed as a result. A study carried out by
the City of Sheffield found that one third of homes on the market
were available for less than £35,000. Low property values
combined with reduced interest rates have increased the attractiveness
of owner occupation in relation to renting. At the same time,
social renting is becoming a less attractive option. Rents have
been forced up by systematic cuts in grant rates for RSLs. As
a result many social landlords, including SYHA, are experiencing
"churn" in their tenants and properties have become
harder to let with properties remaining empty for longer.

Problems of market failure in some areas which
resulted from these pressures have not been met by a corresponding
increase in housing funding in neighbourhoods requiring renewal.
For example, the housing capital budget held by the Regional Development
Agency for Yorkshire and Humberside has dropped from £20m
to £3m this year. In the private sector,

"Clearance and renewal has increasingly
become marginal to the regeneration process leading to increasing
environmental distinction between the core and periphery of cities"
(Discussion Paper produced for Liverpool City CouncilBrendan
NevinJune 2001)

In the same report, Brendan Nevin comments on
the obsolescence of much local authority housing:

"The social housing stock in some towns
and cities in the North is a product of the local social-economic
conditions prevalent in the 1930's and 1950's. The history of
higher unemployment, low wages and structural changes particularly
in northern England provided the political impetus for the mass
provision of public sector housing. This housing is now frequently
not of the type or scale of provision required in the 21st century."

As the affluent, suburban market expands, the
contrast between these areas and the declining inner city neighbourhoods
with obsolete properties becomes more marked. The capital required
to deal with these problems has not been made available by Government.
Although in the last Comprehensive Spending Review resources for
housing investment increased significantly, the majority of new
Housing Corporation investment has been diverted to meet the housing
needs of London and the South East. This switch has been dramatic
over the last 12 months. Locally, attempts to tackle urban degeneration
have all too often focussed on economic solutions with only limited
success:

"A singular focus on traditional forms of
economic investment will not promote the sustainability of a vulnerable
neighbourhood. Residents who secure jobs, or better jobs, are
likely to leave their neighbourhood if it is not an attractive
place to live. A balanced strategy of investment in four forms
of capitalhuman, social, environmental and fixedis
necessary to ensure community well being and a sustainable future
for vulnerable neighbourhoods." (page viHARCC report)

For all the talk of "joined up policy making"
the case for housing investment as an essential part of neighbourhood
renewal has been left in the wilderness. In Yorkshire and Humberside,
the Regional Economic Statement has little to say on housing.
Housing professionals in South Yorkshire are fighting a rear-guard
action to include housing related investment and activity as part
of the Objective 1 funding programme. Locally, no housing associations
have been able to secure places on Local Strategic Partnerships
and there is little prospect of significant investment in housing
coming from the Neighbourhood Renewal Fund. Nationally, housing
investment patterns are substantially driven by housing shortage
and not the need for neighbourhood renewal and housing market
restructuring.

3. THE EFFECTS

Ethnic minority communities have lost out disproportionately
from neighbourhood degeneration. For example, Asian communities
in Yorkshire are predominantly clustered in high density neighbourhoods,
living in smaller terraced properties many of which were built
before 1919. The National Strategy for Neighbourhood Renewal Action
Plan contains the alarming statistic that 70 per cent of all people
from BME communities live in the 88 most deprived local authority
districts. Segregation of communities between black and white,
affluent and poor, is accelerated by sharp contrasts in housing
conditions and the relative ease of access for affluent people
into more desirable neighbourhoods. It will be important to monitor
the impact of the Government's rent restructuring framework as
the CRE's Race and Housing Inquiry report states:

"There is some prima facie evidence that
the new rent regime has the potential to create perverse consequences.
It appears that in some places RSLs are moving their bidding away
from lower value areas. This movement may adversely affect BME
communities if there is a wider disinvestment effect." (Challenge
Report 2001)

One of the phenomena we have experienced increasingly
in recent years is the speed with which neighbourhoods can experience
a spiral of decline. In particular, crime and the fear of crime,
can drive people away from particular areas leaving both empty
properties and, for social housing, landlords experiencing problems
in re-letting this stock. Pressures to drive down voids can lead
councils and RSLs to offer the homes to anyone willing to take
them. This can enable criminal communities to establish themselves
quickly and can lead to concentrations of vulnerable people. If
action is not taken quickly, marginal areas can quickly deteriorate
into neighbourhoods for which clearance becomes the only solution.
Action taken to address the problems of particular neighbourhoods
can, even if successful, have side effects for neighbouring areas:

"Expansion of some neighbourhoods is at
the expense of others. The circumstances engendering growth in
one neighbourhood have a bearing on the decline of another."
(page 12: HARCC report)

Similarly, Brendan Nevin comments:

"Many of the areas worst affected by housing
market change have been recipients of every government sponsored
initiative over the last 30 years. These initiatives have not
succeeded in altering the trajectory of inner urban areas. In
a rapidly changing housing market, small area renewal may simply
transfer problems to adjacent neighbourhoods."

One of the side effects of low demand in Yorkshire
and Humberside has been that opportunities have been created to
house asylum seekers in the region. The Home Office's Dispersal
Programme has seen 5,800 homes in Yorkshire and Humberside made
available for asylum seekersthe highest number dispersed
to any region outside London and the South East. Over 1,000 asylum
seekers now live in Sheffield alone. This has helped to stabilise
housing markets in some areas. Safe Haven Yorkshire now works
with 170 landlords, many of whom have purchased low value properties
and refurbished them to the high standards set by the Home Office.
There is an opportunity to build on the positive effects of this
programme provided policies are developed to retain asylum seekers
receiving positive decisions in the regions to which they have
been dispersed. The policies and mechanisms to achieve this do
not currently exist.

4. SOLUTIONS

The following proposals are broken down by organisation:

(i) Central Government

Establish a Housing Market Renewal Fund to enable
local authorities and RSLs to tackle housing market failure across
all tenures.

Equalise rates of VAT between newbuild and rehabilitation.

Adapt PPG3 to ensure that newbuild estates provide
balanced communities (through requiring developers to incorporate
social housing in new schemes, and not to escape this through
the payment of commuted sums).

Policy needs to be adapted so that additional
private sector house-building does not lead to or exacerbate market
failure in existing neighbourhoods.

Develop a policy for move-on accommodation for
asylum seekers with positive decisions ensuring that access to
housing and jobs is made available in the Regions.

Consider the opportunities for RSLs to rehabilitate
older council stock to prevent a spiral of decline on vulnerable
estates (if the Inquiry visits Sheffield we would be pleased to
show you how this works in action on the Longley estate in Sheffield).

(ii) Housing Corporation

Assess the effectiveness of the Approved Development
Programme by the impact of RSL investment in marginal areas, and
not solely by the numbers of new homes developed. (Rent restructuring
has meant that grants will increase in low value areas. There
is a real danger that a target-driven approach will provide a
disincentive to the Corporation for supporting schemes in low
value areas in the North. Action taken now could prevent this.)

Roll out across the North of England the "new
tools" pilot programme which allows the ADP to be used to
take action in multi-tenure areas, including funding RSLs so they
can acquire and demolish homes that are obsolete and have no viable
future.

Support research into the operation of local
housing markets.

Allow associations to invest in run down neighbourhoods
and take the risk that, on occasions, mistakes may be made.

Take forward recent work on developing joint
strategies and allocating new funds to programmes which meet these
priorities.

(iii) Local Authorities

Provide the strategic lead in determining where
investment and renewal is required, and where clearance and disinvestment
is a better option.

Work across local authority boundaries to consider
the impact of wider housing market areas (if the Inquiry visits
Sheffield we would be pleased to explain how the local authorities
and RSLs have formed such a partnership in South Yorkshire).

(iv) Housing Associations

Maintain their traditional values, commit to
working in low value areas and be willing to take risks. (Note:
there is an alarming trend for some RSLs to pull out of neighbourhood
renewal and concentrate their new service developments in high
value, high demand areas.)

Adopt the spirit and the letter of the CRE's
Race and Housing Challenge report.